Last Thursday, the newly expanded Federal Advisory Committee on Insurance (FACI), an advisory body to the Federal Insurance Office (FIO), held its first meeting to discuss an array of topics including the committee’s new structure. Earlier this year, the FACI expanded from 15 to 21 members to better represent the diversity in today's insurance market, according to FIO director Mike McRaith. The new chairman for the committee is Daniel S. Glaser, Marsh & McLennan Companies president and CEO. At the beginning of the meeting, McRaith discussed a change to the subcommittee structure from last year. Two subcommittees will now meet periodically between the official FACI meeting dates. The two new subcommittees are the International Developments Subcommittee, chaired by Commissioner McPeak of Tennessee, and the Affordability and Accessibility of Insurance Subcommittee, chaired by Birny Birnbaum, executive director of the Center for Economic Justice executive director. The second half of the meeting involved suggestions from each FACI member on an insurance topic of interest for review by the FIO. The broad list of topics included increased transparency on international insurance developments, including the activities of the International Association of Insurance Supervisors, and the creation of global capital standards. The discussion also highlighted issues of affordability and accessibility for consumers, including business insurance, as well as the proper use of risk classification data. Of particular interest was a comment by North Dakota House Representative George Keiser on the implementation of the surplus lines tax allocation framework: Keiser specifically said states need to readdress this issue and look at ways to improve the tax-sharing processes. Other prominent meeting topics included Systemically Important Financial Institutions and Internationally Active Insurance Groups and their relation to financial stability. The group also discussed possible ways of ensuring a level playing field for domestic and international insurers and considering the impact of increased regulations on smaller, single-state insurers. McRaith acknowledged that FACI would not cover every topic discussed but rather review most issues with a broad brush. He closed the meeting by commenting on the “Ways to Modernize and Improve the System of Insurance Regulation in the United States” report the FIO released last December, specifically highlighting a few issues currently under Congressional consideration and endorsing the NARAB II legislation. Finally, McRaith said the FIO report reiterated support for state regulation of insurance and federal involvement in ways that complement the state system. The Big “I” remains a strong supporter of state regulation of insurance and will continue working to ensure the FIO does not experience any mission creep, remaining only an informational body as authorized by Dodd-Frank. The next FACI meeting is scheduled for Nov. 6.
Jen McPhillips is Big “I” senior director of federal government affairs.
